We have recently prepared some crosslinked derivatives of Escherichia coli β-galactosidase by treating the enzyme with bisimidoesters. In this article, we report the results obtained when the native and these crosslinked derivatives are entrapped in polyacrylamide gel lattice. It was found that use of combination of three protective agents, viz., bovine serum albumin, cysteine, and lactose, during immobilization gave an increased yield of 190% in the case of DMA crosslinked preparation. In the case of native enzyme, the Km, pH optimum, and temperature optimum were found to remain unchanged on immobilization. The DMA crosslinked preparation entrapped in polyacrylamide in the presence of BSA, lactose, and cysteine was found to be a significantly better catalyst and hydrolyzed 47% milk lactose as compared to 31% hydrolysis by entrapped native enzyme in 6 h.